The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1887-12-15
THE NEW MAGIC CITIES"
THE DANGERS THAT THREATEN GER
TAIN OVER DOOMED LOCALITIES.
An Attempt to Sustain Artificial VAL
ues-B Borrowing to Tide over-Com-
petition with Black Workmen go A
Movement to Organize the Workers.
From the New York Herald.
The New South.

has bcru ringing with the fairy tale of the
souths awakening, OF her wonderful min.
eral resources, OF the new towns and cities
springing up, of fortunes made in day and
all the rest Of IT,
Now, that tie fermentation has subsidized,
II is worth while 10 blow on the froth and
glance at what is under IL, Well, the siiua.
lion Is seriously strained. In the new man
ufaciuring cities everybody has been doing a
little more than was safe, and, consequently
Is now borrowing Money commands 10 10
IL per cent and even more, and the lowest
rate at the banks on absolutely safe security
Is per cent. month. The boom has sub
sided but the people are trying 10 sustain
real estate on the absurdly high level 10
which IL Was lifted in the period Of crazy
speculation, II rests upon q vast trestlc
work Of interrelhted credits.
Land owners, hotel keepers, agents, shop
keepers mcchanics--the humble owner Of
single lot not yet half paid for, and the land
company with millions Of capital-arc all
trying TO talk up and hold MP values. The
creditor does not dare to press the debtor,
for il one brick in the row is topplcd over,
WHITE HlhAA lHfNlkltlN ~ WV hilN wv WV
could tell where the trouble would end.
PRAYING TOR ANOTHER mGn TIDE
Everybody is hoping for another boom
for rising tide Of speculation on which he
may fluat out Of his difficulties. He feels
sure that this revival is coming soon, but
pending its fanoied advent his needs are
pressing. lie must have money 10 tide over,
aud to yet IL lac Is Obliged 60 pay Whatever
the londor chooses 10 ask In many in
stances the rates paid amount 10 conhsca-
ton. The borrowers are doomed.
The state 81 affairs In the new manufact-
uring city Of Birmingham, Ala, Is fairly
representative. During the boom one
year ago, the Elyton Land company (which
founded the city, sold one end Of building
lots at enormous prices, taking onc-fourth
cash and notes at one, two and three years
respectively for the remaining ccfourtlis.
The one year notes have Of late been falling
due from day 10 day, but the makers are
unable to pay.
Tho lots were sold for absurlly high prices
AS high n. ~ 900 per front foot on the rng-
rcd outer edge OF 10 called business
streets. The twenty-five per cent cash pay
mcnt In most instances probably represents
the full intrinsic value ul the property, or
more than the value, hut most oi the loii
were bought on speculation, and In many
instances lots, after sale by company, have
passed through several hands at always AL
NancinF prices; 10 that they are now nom
inally owned by persons several removes
from the original buyers
~ DANCER or COLLAPSE.
Now that the boom has died ont aud there
s. no demand fur lots, the lat buyers cannot
fcll except NJ great sacrifice But The lot
owners aud the company are alike interested
in keeping property up ON IT, fictitious level
Cool headed investors who visit the city arr
repealed by the prices asked to the pcrma.
ncnt injury 81 the town. True, the city u
ringing iu,t now with the sounds Of hammer
aud troNr but most uf thi, work is being
done under contracts made last spring or
GUNNER while the fever was on. | could
learn ~ few or no new contracts being made.
The land company " now carrying
those who bought It's lots, and individuals
who ~,ld ral estate are doing the same by
their dcbiurs. ~ the company could seize
the lots Il could not sell thrm ~ that the
notes (which bear interest, Of oourscl are
more valuable than the dirt" provided
the drawer succeed In pulling through and
VI they do not, the company can then re-
cover the land anyhow. From selfish mo
iivcs the company must extend the notes ~
dcllnquenis aud help them nlong-thc CON
rrh must he kept ngoing or he smashed
With the passing Of the boom business Inns
ihlfh on ANU tholh'fl"Iat NNlu'lih WIN
frighuully high rents, ARE In danger ui go
ing 10 the vail. The company, Il may Ice
noted, could not forccloso u Il would, Tor Il
has not q mortgage ON the lands sold. Ia
eicad Of giving the buyer a deed aud taking
nmorirnrr iur balance of purchase money
the company riyCs simply bond that Oh,
title shall BE- vested In the holder when th,
last payment shall be made.
The casc With which these bonds could b,
fVuUsTnrrst1 a uFt clement N INafFFNftfr Iltf
wildspccula,ion. To wipe on, the claim uf ihl
holder NJ those, however, would involved
long aud tedious litigation. AZ Decatur an,
tomc other new cities they are wiser. thcl
give the buyers deeds aud clap mortgage
on the property for the balance Of purchas
money
A ooRRonoRATiNd nir oP TiNASCiERiN0
She lslyion Land company passed it, di,i
dctd Tire other day, this indirectly confirm
ing the correctness q the statements mad
above. Instead u paying IL oash dividcn,
the company issued script convertible int
bonds. The script represents, the compnn
fays e. ipO,D u good notes w IT, trrasuty
md as tho,r cannot be- disturbed they af
going to make an issue Of bonds instead. 4
other words instead of the usual cash div
dcnd The stockholders ur Offered n moriglr
on their oun property, and this because Ga
dmNcr ~ Tie notes arr probably 'lyin
down"
IT, iieht squcczc II money shout
become rlsy and the iron Trade should b
prosperous and there should h. new spru
ulali1c boom Ia realty birmingham vi
pull through
ANrgY IMPORTANT "W."
But II monetary strincyncy continues nm
speculation continues moribund, nnd 81
tioppagc oi steel railroad building iu n
northwest should depr.s the iron industr
ns now seems certain, then thcru Is going
hc n sal collapse In the Magic City'-a GO
lapse which will shake the New south a. q
.enicr, for the same conditions prevail In n
Other towns, the bad features being Ia o
exact ratio "a the madness ul the Speculation
recently carried ON. AL this will pruhabl
be scouicd by those whose pccuninfy int
csis an involved, but H. true jusi tie Klm
~ much lUr Tie financial situation in Il
new crnirr., ~ 20 their future growth M
their ultimate prosperity and impoHHn
there can be- no question. Before there ri
be any new leap forward, however the
will have ~ hc wiping out Of mere pap
value. a great deal 81 charging OF a. pro
and los, s,mr men who fancy that th
arr worth sluOOp will have 90 riiIgr OBJ
The hall 81 that would he n very hlrh tu
price iur What they hold Others Vhu are d
Ear cxtrndrl vii have o. "lct ~" nul Doe
must be rcncIal adjustment II vrlH Un
rational uud practical basis instead ~ /;
present speculative one. frics and rcr
must come down.
nENrALs ALMOST rrouIniriyr
On Firi avenue, Birmingham. the writ
Was In little shop on the hrsi hoof 81 "a q
story brick building. There we're uu %.
tioncs In irOnt-only dirt sidewalk. vi
The dust rising in little CLOUDS from the &,
ofpc,lcirians.
"Mhat rent DO you pay here. I" Wa the f,